The Case for Spending on Operational Business Efficiency
Efficiency is a function of a solution’s impact on meaningful time savings for key resources within a company. It’s not just about the ROI and cost savings; it’s about the degree to which it helps the business thrive. Improving operational efficiency can be approached in a number of ways. Some methods involve changes to processes or personnel. However, well-designed software applications often have the most benefit for the lowest cost. This article discusses this further with an industry specific example.
When designed correctly, software has the ability to improve business processes with the lowest initial cost. The most common measure of the value of a given solution in the enterprise is the total Return on Investment (ROI) achieved by using it. But products don’t necessarily become ‘sticky’ to organizations by showing long-term savings alone. The real test of value comes from the number of users who feel their job is materially improved and by the depth of integration into their core business processes.
The collective user base for a software application have enormous ability to improve common tasks that they share. In the consumer world, growth and success of websites are measured by both new accounts and monthly active users of the site. This is important for bringing in advertising contracts and building the roadmap of new features. However in the enterprise IoT business, a healthy balance has to be found between the needs of the actual users and business goals of those making the purchasing decisions. The users need robust functionality in the application and the businesses executives typically are most interested in achieving their ROI goals while keeping costs to a minimum. Thus, the ultimate software solution must provide the full functionality requested at the best available price point.
In the industrial IoT space, asset monitoring and tracking has proven to be a reliable long-term way to improve efficiency. Petroleum and chemical distributors of all sizes are benefiting from closely monitoring assets and making operational decisions on the analytics provided. Organizations that embrace the data-driven decision making mindset, will see immediate improvements. When business managers are better informed they can be more effective at scheduling product replenishment, scheduling fleet routes and planning maintenance checks that help their bottom line.
In a specific example, if a chemical distributor must deliver a given amount of product to a customer to keep their business running smoothly, they will need to know how much of that product is in the tank at the customer’s site at all times. Rather than scheduling frequent “top-off” trips to ensure the product is kept full, they can plan to deliver at the optimal time based on known product consumption rates. By reducing the number of scheduled deliveries they need to make and maximizing the amount of product delivered per trip, they can provide a service that is reliable for their customer and optimally efficient for their operations. The data available in this industrial monitoring solution can demonstrate verifiable cost savings and can provide an on-going scorecard for the managers to review against the company goals. But what happens when the solution can offer more than a business analysis metric?
Any platform solution that goes beyond the requisite business intelligence tool and becomes embedded into an organization’s processes has an almost intangible proven value to its everyday users. These users can also help drive requirements for future enhancements and ideas that can be built into the software that directly affect them. When mangers, dispatchers, and support staff come to rely on the software to perform core business functions, the seamless integration into the rest of the CRM, accounting and other indispensable business tools is key. The jobs of everyday users are made easier and they can focus on more pressing aspects of serving their customers. So if you are a business executive looking at strategies for improving your operational efficiency, consider the full range of benefits when evaluating potential solutions to invest in.
